"If you win the case, the other party will reimburse you for all litigation costs incurred. Right?"
This time a blog on the system of litigation expenses in civil law. It strikes us that many people still think that when a party wins a case in court, that party gets full reimbursement of the litigation costs from the other party. Unfortunately, this is not the case in the majority of cases. The main rule is that the winning party is reimbursed only a portion of the litigation costs incurred. This can also discourage some parties from initiating proceedings.
In this blog, litigation costs include attorney fees, court fees and bailiff fees.
This blog will focus on the compensation for litigation costs when a case wins. As an example, a simple procedure in court will be used for a moment.
An example of court proceedings
To bring a case to court, a summons will normally have to be issued (some proceedings are initiated with a petition). In many cases, the other party will respond in writing. It is common for a hearing to be scheduled afterwards. The judge can then ask questions and see if the parties can possibly reach a settlement. In fact, if the parties reach a settlement, the judge does not need to issue a ruling.
Imagine this. Your company has a claim of € 30.000,- against a debtor. You engage a lawyer and a summons is drawn up by this lawyer. The bailiff serves this summons on your counterparty. Then, in order to "file" the case with the court, you as the plaintiff must pay court fees. In this situation, the fee amounts up to € 952,-. The opposing party submits a written response. Of course, the contents of this must first be studied by your attorney. Then a hearing will take place where you and your lawyer will be present. This of course involves costs.
No settlement is reached. The judge will decide in your favor. It is then customary for the judge to also award costs because you have had to litigate to obtain your right. In your case, a writ has been issued and it will be ruled that the bailiff's fees must be paid by the other party. This will also apply to the court fee paid by you. However, your attorney fees will not be fully reimbursed. This is because the amount of attorney fees will be determined based on liquidation rates issued. The liquidation rate that will be assigned depends on the work performed and the importance of the case. A number of points is assigned for each action. Each point has a value. That value depends on (the importance of) the case.
In the example, points will be awarded for the summons, the opposing party's response to it, and the hearing. Three points, therefore. Since your case has an interest of € 30.000,- one point represents € 721,-. Therefore, a total of € 2.163,- (€ 721,- times 3) will be awarded in attorney fees. If your attorney fees are higher, this means that you will still be left with a balance.
What about a subdistrict court case?
If your case is before the subdistrict court, the same principle applies. Within civil law, the subdistrict court handles cases up to an amount of € 25.000,-. The subdistrict court also handles, for example, employment cases, rental cases and consumer purchase cases. In a subdistrict court case, it is not obligatory to be assisted by an attorney. However, many parties do. However, the liquidation rates are lower. Therefore, if your claim had been, say, €15.000,- the attorney fees to be awarded will be lower. However, this does not mean that in reality your attorney fees would also have been lower.
Deviating from the liquidation rate? Only in very exceptional cases
The court is allowed to deviate from the liquidation rate. However, this almost never occurs. It only happens in very exceptional circumstances. This could include, for example, the situation where there is an abuse of procedural law. Case law has shown that this can occur, for example, if the plaintiff bases his claim on facts and circumstances of which he knew or should have known the inaccuracy or on statements of which he should have understood in advance that they had no chance of success. There must therefore be an a priori likelihood of success. This does not happen easily. This is also viewed with caution, since it is legally guaranteed that everyone has the right of access to the courts.
Want to know more?
Do you have questions about this blog post or have other questions in the area of procedural law? If so, please feel free to contact one of our lawyers.